Israel signs high-tech deal with India

TEL AVIV, Israel, June 6 (UPI) -- Israel's High-Tech Industry Association has signed a memorandum of understanding with its Indian counterpart to boost cooperation in advanced technology, a move that will undoubtedly increase the Jewish state's burgeoning defense sales to India.

The Jerusalem Post reports that industry executives see the accord with the Confederation of Indian Industry, signed June 1, leading to a convergence of "Israel's innovative prowess with India's huge and talented pool of human resources."

Trade between Israel and India -- one Jewish, one Hindu, both locked in conflict with Islamist terror groups -- hit $47 billion in 2010, with India moving into second place among the Jewish state's export markets.

That didn't include defense sales on more than $1 billion annually. India is engaged in a top-to-bottom upgrade and expansion of its armed forces.

This includes massive spending on combat aircraft and building up naval forces to project Indian power across the Indian Ocean, a vital energy and trade route between the Middle East and Asia.

"Increased arms spending has created a natural market for Israeli military technology such as unmanned aerial vehicles and airborne early warning radar systems," the Post said.

In recent years, Israel has consolidated defense links with India into a strategic relationship.

On April 20, 2009, India launched its 650-pound RISAT-2 satellite, built by state-owned Israel Aerospace Industries and carrying the same multi-spectral aperture radar as the Tecstar-1 satellite developed for Israel's military.

The Indians, with Israeli help, fast-tracked vital surveillance systems in the wake of the attack by Islamic extremists on Mumbai, India's commercial hub, in November 2008 in which 166 people were killed, five of them Israelis.

In January 2009, India took delivery of the first of three Phalcon all-weather AWACS, also built by IAI, the flagship of Israel's defense industry, under a $1.1 billion deal. The radar system, produced by Israel's Elta Industries, is built around the Russian-built Ilyushin Il-76 aircraft. Delivery was advanced by two months following the carnage in Mumbai.

The Phalcons made India the first state in South Asia to have advanced multi-sensor AWACs capable of providing tactical surveillance or multiple airborne and surface targets and able to gather signals intelligence.

As part of the Phalcon deal, the Israelis disclosed they would establish five factories in India to produce artillery shells, a project reportedly worth $250 million.

Ties like this will likely deepen through the high-tech accord because of an Indian requirement that local components account for 30 percent of any contract.

Given the fast-growing markets emerging in India and China, the high-tech accord is tailor-made for Israel's export-heavy economy. The two countries are already discussing an agreement to remove trade barriers.

The Israelis are focusing on the Indian state of Andhra Pradesh, home of the fast-growing software center at Hyderabad.

It is close to signing an agreement with Matimop of Israel, a government agency that facilitates multinational research and development projects.

Andhra Pradesh is becoming a high-tech industries powerhouse, with software exports of $8 billion in 2010.

Missiles are a key Israel-India connection, and that requires intensive high-tech cooperation.

In 2008, India signed a $4.1 billion deal to purchase a shore-based and seaborne anti-missile air-defense system based on Israel's Barak long-range naval weapon built by IAI.

In August that year, New Delhi signed a $2.5 billion contract with IAI and Israel's Rafael armaments company to jointly develop an advanced version of the Spyder surface-to-air missile.